Recently, Celgene Corporation (CELG) announced preliminary results for the fourth quarter and full year 2010. For the final quarter of 2010, the biotechnology company expects to earn 73 cents per share on an adjusted basis which reflects an 18% increase over the year ago earnings. The Zacks Consensus Estimate for the fourth quarter of 2010 before the announcement of the preliminary results was 68 cents. On a reported basis (including special items), the company expects to earn 41 cents per share. The company expects to announce final results on January 27, 2011.
The company announced preliminary fourth quarter revenues of approximately $1.05 billion, up 38%. The impressive showing in the fourth quarter was driven by strong sales of Celgene’s cancer products Revlimid and Vidaza. The preliminary fourth quarter revenues topped the Zacks Consensus Estimate for revenue of $1.03 billion.
The company reported preliminary fourth quarter Revlimid net sales of $708 million, up 42%. Meanwhile, Vidaza continued performing impressively with sales climbing 20% to $141 million. However, net sales of another cancer drug, Thalomid, continued declining due to the availability of better alternatives.
Preliminary Thalomid sales were $91 million, down 17%. Preliminary net sales of Abraxane, added to the portfolio via the purchase of Abraxis BioScience in October 2010, were $71 million for the quarter. However, Abraxane, already approved as a second-line therapy for metastatic breast cancer, did not perform well in a late-stage study in patients suffering from non-small cell lung cancer.
For the full year 2010, Celgene reported preliminary adjusted earnings of $2.80 (up 35%) on revenues of $3.62 billion. While preliminary Revlimid sales increased 44% to $2.47 billion, Vidaza sales climbed 38% to $534 million. The Zacks Consensus Estimate for 2010 before the announcement of the preliminary results was $2.53 on revenues of $3.56 billion.
2011 Forecast provided
Apart from announcing preliminary results Celgene also provided a projection for 2011. In 2011, the company expects to earn between $3.30 to $3.35 per share (on an adjusted basis) on revenues of $4.4 billion-$4.5 billion. Revlimid sales are expected to contribute the lion’s share to total revenues. Sales of the cancer drug are expected in the range of $3 billion to $3.1 billion (up approximately 25%). The Zacks Consensus Estimate before the announcement of the preliminary results was $3.09 on revenues of $4.4 billion.
Our Recommendation
Currently, we have a ‘Neutral’ stance on Celgene in the long-run, which is supported by the Zacks #3 Rank (short-term ‘Hold’ recommendation) carried by the company.
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